ITEM
10. Directors, Executive Officers and Corporate Governance
Board
of Directors
Set
forth below are the names, ages, board committee assignments, tenure and certain biographical information of each of the members
of our Board of Directors as of April 23, 2020.
Name
|
|
Age
|
|
Director
Since
|
|
Committee
Assignments
|
Allen
Wolff
|
|
48
|
|
2020
|
|
None
|
Gregory
Thomas
|
|
59
|
|
2017
|
|
Audit*,
N&CG/C **
|
Richard
Simtob
|
|
50
|
|
2017
|
|
Audit,
N&CG/C *
|
Susan
Miller
|
|
40
|
|
2019
|
|
Audit,
N&CG/C
|
Michael
Gottlieb
|
|
50
|
|
2019
|
|
None
|
*
Committee chairperson
**Nominating
and Corporate Governance/Compensation Committee
Allen
Wolff was appointed as our chief executive officer and as a member of our board in January 2020. He was appointed as chairman
of our board in April 2020. Mr. Wolff served as our interim chief executive officer from September 2019 until he was appointed
as our chief executive officer. From January 2016 through September 2019, Mr. Wolff served as our chief financial officer and
executive vice president and served as chief financial officer from December 2014 through January 2016. From July 2013 until December
2014, Mr. Wolff served as the chief financial strategist of PlumDiggity, a privately-held financial and marketing strategy firm
that he co-founded. From October 2012 to July 2013, Mr. Wolff served as the chief financial officer of 365 Retail Markets, a privately-held
company in the self-checkout point of sale technology industry, where he also served on its board of directors during such period.
From July 2011 to April 2013, simultaneous with his role at 365 Retail Markets, Mr. Wolff held the leadership role of “Game
Changer” at Crowdrise, an online fundraising platform company. Mr. Wolff joined Crowdrise after serving as the chief operating
officer and chief financial officer from January 2011 to July 2011 of RetailCapital, LLC, a small business specialty finance company.
Mr. Wolff co-founded PaySimple in January 2006 and held various roles including president, chief financial officer, executive
vice president and director, from 2006 until he left the company in January 2011. From September 1998 until August 2012, Mr. Wolff
was a principal for a casual dining restaurant. Mr. Wolff holds a B.A. from the University of Michigan and an MBA, from the University
of Maryland, R.H. Smith School of Business. Mr. Wolff was chosen to serve on our board of directors because of our boards’
belief that our chief executive officer should serve on our board of directors, as well as his leadership of early stage, technology
companies and ability to raise capital.
Gregg
Thomas has served on our board of directors since July 2017, and from August 2019 until April 2020, he served as chairman
of our board. In December 1994, Mr. Thomas founded CFO Advisors, LLC, a financial services and advisory firm for the restaurant
and retail industry, and where he has been serving as partner. He began his career at Plante Moran, where he earned his CPA. Mr.
Thomas holds a B.S. in accounting from the University of Michigan and a masters in taxation from Walsh College. Mr. Thomas was
chosen to serve on our board of directors because of his experience in the restaurant industry and his financial and accounting
background. In March 2020, Mr. Thomas notified us that he intends to resign from our board of directors effective April 30, 2020.
Richard
Simtob has served on our board of directors since July 2017. Since January 2001, Mr. Simtob has been serving as president
of Simtob Consulting Group Corporation. Mr. Simtob is a minority-owner of Zoup! Holding, LLC, a company that operates and franchises
fast-casual soup restaurants and has been serving as vice president since January 2018. Since April 2010, he has served as one
of its directors, and served as its president from April 2010 to December 2017. From January 2004 through July 2009, Mr. Simtob
was also a partner at Wireless Toyz Franchise, LLC, a cellular service provider, where he also served in various roles such as
vice president of development, chief financial officer and chief operating officer. Mr. Simtob owns a Michigan-based driving school
and eight swim school locations. Mr. Simtob studied at the University of Western Ontario. Mr. Simtob was chosen to serve on our
board of directors because of his extensive experience in the restaurant industry.
Susan
Miller was appointed to our board of directors in August 2019. Ms. Miller is a partner with Morgan Kingston Advisors,
LLC a boutique investment bank she co-founded in September 2018 focused on supporting middle market companies and their stakeholders
across the restaurant and restaurant technology sectors, among others. From March 2007 until September 2018, Ms. Miller served
as a managing director at Mastodon Ventures, Inc., a strategic advisory firm focused on the restaurant industry, and from June
2002 until March 2007 she held various positions with J.P. Morgan Securities Inc. Ms. Miller was a Cornell Tradition Fellow and
graduated cum laude with a B.S. degree in applied economics and management from Cornell University and holds FINRA Series 63 and
79 securities licenses. Ms. Miller was chosen to serve on our board of directors because of her advisory, investment banking and
capital markets experience in the restaurant and technology markets.
Michael
Gottlieb was appointed to our board of directors in November 2019. Currently, Mr. Gottlieb provides consulting services
to Digital Gaming Corporation, a computer software company, and from October 2019 until December 2019, he was in charge of its
US business development. From April 2017 until October 2019, Mr. Gottlieb served as the studio head for MahiGaming San Diego,
a developer of online and mobile gaming software, and from November 2014 until March 2017, Mr. Gottlieb served as senior director
of game development for Bally Technologies and Scientific Games, gaming manufacturers. Mr. Gottlieb has a business degree from
Northern Illinois University. He was chosen to serve on our board of directors because of his expertise in developing interactive
gaming experiences and turning them into successful businesses.
Executive
Officers
The
following table sets forth certain information regarding our executive officers as of April 23, 2020:
Name
|
|
Age
|
|
Position
Held
|
Allen
Wolff
|
|
48
|
|
Chief
Executive Officer
|
Sandra
Gurrola
|
|
53
|
|
Senior
Vice President of Finance
|
Information
regarding Mr. Wolff can be found under “Board of Directors” above.
Sandra
Gurrola was appointed as our senior vice president of finance in September 2019 and served as vice president of finance
from September 2014 until September 2019. From November 2009 through September 2014, Ms. Gurrola served in various leadership
accounting roles including director of accounting, director of financial reporting and compliance, and controller. From July 2007
until April 2009, Ms. Gurrola served as senior manager of financial reporting for Metabasis Therapeutics, Inc., a biotechnology
company, and served as a consultant to Metabasis from September 2009 to November 2009. Ms. Gurrola holds a B.A. in English from
San Diego State University.
Family
Relationships; Arrangements; Legal Proceedings
There
are no family relationships among any of our directors and executive officers. There are no arrangements or understandings with
another person under which our directors and officers was or is to be selected as a director or executive officer. Additionally,
none of our directors or executive officers is involved in any legal proceeding that requires disclosure under Item 401(f) of
Regulation S-K.
Committee
Charters and Code of Ethics
Our
board of directors has adopted charters for its audit and nominating & corporate governance/compensation (N&CG/C) committees,
which, among other things, outline the respective duties of the committees. Our board of directors has also adopted a code of
conduct and ethics that applies to all our employees, officers and directors. Our code of conduct and ethics, our corporate governance
guidelines and the charter of our audit and N&CG/C committee is available at www.buzztime.com/investors/ under the “Corporate
Governance” heading. We intend to disclose any amendment to, or a waiver from, a provision of our code of conduct and ethics
that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons
performing similar functions and that relates to any element of the code of ethics definition enumerated in paragraph (b) of Item
406 of Regulation S-K by posting such information on that website. The information on our website is not incorporated by reference
in this report.
Audit
Committee and Audit Committee Financial Expert
The
audit committee is currently comprised of three non-employee directors: Mr. Thomas, Mr. Simtob and Ms. Miller, each of whom our
board of directors has determined is an independent director under the rules of the NYSE American and of the Securities Exchange
Act of 1934. Our Board of Directors has determined that each member of the audit committee is able to read and understand fundamental
financial statements including our balance sheet, income statement and statement of cash flows. Our board of directors has also
determined that of the current members of the audit committee, only Mr. Thomas qualifies as an “audit committee financial
expert,” as that term is defined in Item 407(d)(5) of Regulation S-K. As of April 23, 2020, we have not identified a candidate
to replace Mr. Thomas on our board of directors or on the committees on which he serves following his resignation on April 30,
2020.
Changes
in Stockholder Nomination Procedures
There
have been no material changes to the procedures by which stockholders may recommend nominees to our board of directors since such
procedures were last described in our proxy statement filed with the SEC on April 26, 2019.
ITEM
11. Executive Compensation
Compensation
Processes and Procedures
The
N&CG/C Committee is responsible for determining the amount and form of compensation paid to our executive officers, including
our chief executive officer. Our chief executive officer presents compensation recommendations to the N&CG/C Committee with
respect to the executive officers who report to him. The N&CG/C Committee may accept or adjust such recommendations. The N&CG/C
Committee is solely responsible for determining the compensation of our executive officers. Our full board of directors participates
in evaluating the performance of our executive officers, except that Mr. Wolff, our chief executive officer and a member of our
board of directors, does not participate when our board of directors evaluates his performance and he is not present during voting
or deliberations regarding his performance or compensation matters.
When
determining executive officer compensation, and the various components that comprise it, the N&CG/C Committee evaluates and
considers publicly available executive officer compensation survey data, to present a competitive compensation package to attract
and retain top talent, including an appropriate level of salary, performance-based bonus, and/or equity incentives. Typically,
the N&CG/C Committee evaluates between three and five different sources of compensation data to provide relevant market benchmark
data for a given executive role. Additionally, the N&CG/C Committee is authorized to engage outside advisors and experts to
assist and advise the N&CG/C Committee on matters relating to executive compensation. The N&CG/C Committee did not engage
any outside advisors or experts to assist or advise the N&CG/C Committee on any matters relating to executive compensation
during 2019 or the hiring of any executive officers.
The
compensation we paid to our named executive officers in 2019 and the compensation decisions we made in early 2020, predated the
global COVID-19 pandemic. These decisions did not take into account the potential impact of the pandemic on our business. The
pandemic continues to rapidly evolve and we do not yet know the full extent of its potential effects on our business. The N&CG/C
Committee is evaluating the situation and may exercise its discretion in amending or adjusting the compensation of our executive
officers and employees in light of recent developments.
Our
Named Executive Officers
Under
applicable SEC rules and regulations, all individuals who served as our principal executive officer during 2019, our two most
highly compensated executive officers (other than our principal executive officer) who were serving as executive officers at the
end of 2019, and up to two additional individuals who would have been one of our top two most highly compensated executive officer
had they been serving as an executive officer at the end of 2019 are referred to as our “named executive officers.”
Our named executive officers for 2019 were:
Name
|
|
Title
|
Allen
Wolff
|
|
Chief
Executive Officer
|
Sandra
Gurrola
|
|
Senior
Vice President of Finance
|
Ram
Krishnan*
|
|
Former
Chief Executive Officer
|
*
Mr. Krishnan resigned as our chief executive officer in September 2019. Under SEC rules, Mr. Krishnan is considered a named executive
officer because he served as our principal executive officer during a portion of 2019.
2019
Named Executive Officers Compensation Overview
During
2019, our named executive officers received an annual base salary. As discussed below, there was no incentive compensation awarded
to our named executive officers for 2019. None of our named executive officers receive or are eligible for any perquisites or
benefits, other than benefits that are available to our other full-time employees. The employment of each of our named executive
officers is at-will. During 2019, we had written employment agreements with Mr. Wolff, Ms. Gurrola and Mr. Krishnan. Each of the
components of our 2019 executive compensation program is discussed below under the Summary Compensation Table.
Summary
Compensation Table
The
following table sets forth information concerning compensation during the years ended December 31, 2019 and 2018 awarded to, earned
by or paid to our named executive officers.
2019
Summary Compensation Table
|
Name
and Principal Position
|
|
Year
|
|
|
Salary
|
|
|
Bonus
|
|
|
Stock
Awards
(1)
|
|
|
Option
Awards
|
|
|
Non-EquityIncentive Plan
Compensation
|
|
|
All
Other
Compensation
|
|
|
Total
|
|
Allen Wolff
|
|
|
2019
|
|
|
$
|
265,000
|
|
|
$
|
17,333
|
|
|
$
|
37,200
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
319,533
|
|
Chief Executive
Officer
|
|
|
2018
|
|
|
$
|
265,000
|
|
|
$
|
—
|
|
|
$
|
90,600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
355,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sandra Gurrola
|
|
|
2019
|
|
|
$
|
179,356
|
|
|
$
|
–
|
|
|
$
|
26,040
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
205,396
|
|
Senior Vice President
of Finance
|
|
|
2018
|
|
|
$
|
175,000
|
|
|
$
|
–
|
|
|
$
|
18,120
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
193,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ram Krishnan
|
|
|
2019
|
|
|
$
|
278,082
|
|
|
$
|
–
|
|
|
$
|
–
|
(2)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
278,082
|
|
Former Chief Executive
Officer
|
|
|
2018
|
|
|
$
|
350,000
|
|
|
$
|
–
|
|
|
$
|
151,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
501,000
|
|
|
(1)
|
The
amounts reported in this column represents the aggregate grant date fair value of stock awards granted during the applicable
year. These amounts were calculated in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, except
that any estimate of forfeitures was disregarded. For a description of the assumptions used in computing the dollar amount
recognized for financial statement reporting purposes, see Note 11, Shareholders’ Equity, in the Notes to the Consolidated
Financial Statements contained in our Annual Report on Form 10-K filed with the SEC on March 19, 2019.
|
|
|
|
|
(2)
|
We
granted to Mr. Krishnan 30,000 restricted stock units (“RSUs”) that would vest upon the effective date of a change
in control if it occurred on or before March 17, 2020. That condition did not occur, and therefore all 30,000 RSUs were cancelled
on March 17, 2020. The full value of this award on the date of grant was $194,400, assuming the condition to vesting would
have been achieved.
|
Salaries.
Each of our named executive officers receives a base salary. The base salary is the fixed cash compensation component of our
executive compensation program and it recognizes individual performance, time in role, scope of responsibility, leadership skills
and experience. The base salary compensates an executive for performing his or her job responsibilities on a day-to-day basis.
Generally, base salaries are reviewed annually company-wide and adjusted (upward or downward) when appropriate based upon individual
performance, expanded duties, changes in the competitive marketplace and, with respect to upward adjustments, if we are, financially
and otherwise, able to pay it. We try to offer competitive base salaries to help attract and retain executive talent.
Non-Equity
Incentive Plan Compensation For 2019, the N&CG/C Committee approved the NTN Buzztime, Inc. Executive Incentive Plan for
Eligible Employees of NTN Buzztime, Inc. Fiscal Year 2019 (the “2019 Incentive Plan”). The 2019 Incentive Plan permits
the payout of any incentive compensation earned under the plan to be paid, at the discretion and in the sole determination of
the N&CG/C Committee, either in (i) cash, (ii) shares of our common stock issued under the NTN Buzztime, Inc. Amended 2010
Performance Incentive Plan or any successor long-term incentive plan, or (iii) any combination of (i) and (ii). If incentive compensation
is paid in shares, the number of shares issued is determined by dividing the amount earned by the closing price of our common
stock on the date on which the N&CG/C Committee approves the amount of incentive compensation earned. Payments under the 2019
Incentive Plan, if any, are contingent on the applicable participant’s continued employment with us on the payout date.
Participants
in the 2019 Incentive Plan earn incentive compensation based on the level of achievement of the following performance measures:
●
targeted earnings before interest, tax, depreciation and amortization (EBITDA), as approved by the N&CG/C Committee (weighted
up to 10%);
●
targeted revenue, as approved by the N&CG/C Committee (weighted up to 15%); and
●
the extent to which certain strategic milestones are achieved, as evaluated and approved by the N&CG/C Committee (weighted
up to 75%).
Each
2019 Incentive Plan participant had a target payout amount, based on a percentage of his or her annual base salary (excluding
benefits) as of December 31, 2019, that was assigned according to such participant’s position and job level. The target
payout amounts for the named executive officers for 2019, assuming all performance measures were achieved at a rate of 100%, were:
Name
|
|
Target Percentage
of Base Salary
|
|
|
Target Payment Amount
|
|
Allen Wolff
|
|
|
50
|
%
|
|
$
|
132,500
|
|
Sandra Gurrola
|
|
|
10
|
%
|
|
$
|
17,500
|
|
Ram Krishnan
|
|
|
75
|
%
|
|
$
|
262,500
|
|
The
N&CG/C Committee determines the extent to which the performance measures are achieved. In [MONTH 2020], after careful review,
the N&CG/C Committee determined that the EBITDA performance target was achieved and that neither of the other two performance
measures were achieved. Although the EBITDA performance target was achieved and a performance-based bonus was earned, in order
to conserve cash, our executive officers and the N&CG/C Committee mutually agreed to waive payment of the bonus earned in
2019.
In
connection with Mr. Wolff’s appointment as interim chief executive officer in September 2019, Mr. Wolff was eligible to
participate in the 2019 Interim CEO Performance Incentive Plan (the “2019 Interim CEO PIP”). The 2019 Interim CEO
PIP is a performance incentive plan under which, for the achievement of performance goals described therein, we would grant to
Mr. Wolff such number of shares of our common stock equal to $20,000 divided by the closing price per share of our common stock
on the date of grant. Upon grant, such shares would be fully vested. The performance goals were related to: (1) the retainment
of certain key employees determined by the N&CG/C Committee through at least March 17, 2020; (2) having a target amount of
unrestricted cash, as determined and approved by the N&CG/C Committee, as of March 17, 2020; and (3) meeting target sales
for our Buzztime Basic product offering, as determined and approved by the N&CG/C Committee, by March 31, 2020. In March 2020,
the N&CG/C Committee determined that the performance goal related to the retainment of key employees was achieved, and we
issued 9,506 shares to Mr. Wolff, representing $20,000 worth of shares of our common stock, net of withholding taxes.
Employment
Agreements
During
2019, we had written employment agreements with Mr. Wolff, Ms. Gurrola and Mr. Krishnan.
Mr.
Wolff and Ms. Gurrola
As
previously reported, in March 2020, we entered into an amendment to Mr. Wolff’s employee agreement dated March 19, 2018,
which was subsequently amended in September 2019 and January 2020. In January 2020, we also entered into an amendment to Ms. Gurrola’s
employment agreement dated September 17, 2010. The following is a summary of the material terms of Mr. Wolff’s and Ms. Gurrola’s
employment agreements, as amended.
Base
Salary. Mr. Wolff’s base salary is $325,000 and will increase to $350,000 effective July 1 2021. However, in an effort
to help preserve cash, up to 20% of Mr. Wolff’s base salary may be paid in shares of our common stock. Additionally, Mr.
Wolff agreed to defer payment of approximately 45% of all of his annual base salary payments between May 1, 2020 and October 31,
2020 until the earlier of October 31, 2020 or such time as our board of directors determines in good faith that we are in the
financial position to pay his accumulated deferred salary. Ms. Gurrola’s base salary is $190,000.
Incentive
Bonus. Mr. Wolff’s incentive performance-based bonus for 2020 will be 43% of his base salary, or $150,000. In 2019,
the amount of such bonus was 50% of his base salary. Ms. Gurrola’s incentive performance-based bonus for 2020 will be 20%
of her base salary, or $38,000. The performance-based bonuses, if earned, will be payable as follows: 16.66% will be payable if
the applicable performance targets for each of our 1st, 2nd and 3rd fiscal quarters are achieved, and 50% will be payable if the
applicable performance targets for the applicable fiscal year are achieved. The performance targets will be established by our
board of directors (or its N&CG/C Committee), the level of achievement will be determined and approved by our board of directors
(or its N&CG/C Committee), and we anticipate that the performance targets will continue to fall into three categories, the
achievement of which will be determined following each quarter or year, as applicable: strategic, financial and operational. All
incentive-based compensation payable to Mr. Wolff and Ms. Gurrola will be subject to any clawback policy that we may establish.
Mr.
Wolff was also entitled to receive a $30,000 cash bonus if he were to remain employed with us for at least 180 days from September
17, 2019, the date on which he was appointed as interim chief executive officer. To preserve cash, we agreed to issue to him such
number of shares of our common stock equal to a pro rata amount of the $30,000 bonus (determined by multiplying $30,000 by a fraction,
the numerator of which is the number of days lapsed between September 17, 2019 and January 14, 2020, the effective date of the
amendment to his employment agreement appointing him as chief executive officer, and the denominator of which is 180) divided
by the closing price of our common stock on January 14, 2020. As a result, we issued 5,102 shares of our common stock to Mr. Wolff
in respect of this bonus, the value of which was net of withholding taxes on the amount of bonus earned. The value of the portion
of these shares issued in respect of the September 17, 2019 to December 31, 2019 period are included in the “Stock Awards”
column in the 2019 Summary Compensation Table.
Equity
Grants. Under the terms of their employment agreements, in January 2020, Mr. Wolff and Ms. Gurrola were each granted a stock
unit award of 75,000 and 25,000 shares of our common stock, respectively. The awards were made under, and are subject to, our
2019 Performance Incentive Plan, and vest quarterly beginning on the 3-month anniversary of the grant date, in each case, subject
to the executive’s continued service to us as of the applicable vesting date.
Mr.
Krishnan
In
September 2019, we entered into a limited term employment and separation agreement and general release of all claims (the “Krishnan
Agreement”) with Mr. Krishnan. The Krishnan agreement replaced the previous employment agreement, as amended, that we entered
into with Mr. Krishnan. Under the Krishnan Agreement, through October 17, 2019, Mr. Krishnan served as our director of special
projects and worked with Mr. Wolff and members of our board as-needed. His base salary remained at the annualized rate of $350,000,
and paid in accordance with our regular payroll practices over the limited term period of employment. If we terminated Mr. Krishnan’s
employment without cause before October 17, 2019, then Mr. Krishnan would have received the base salary he would have received
through October 17, 2019. On the effective date of the Krishnan Agreement and in consideration for a release of claims, 5,000
of Mr. Krishnan’s outstanding RSUs vested, and we granted to Mr. Krishnan 30,000 RSUs, which would generally have vested
upon the effective date of a change in control if it occurred on or before March 17, 2020. That condition did not occur, and therefore
all 30,000 RSUs were cancelled on March 17, 2020.
Termination
of Employment and Change-in-Control Arrangements
Each
of the employment agreements of Mr. Wolff and Ms. Gurrola provides for certain benefits upon termination of employment under specified
circumstances. If the executive’s employment is terminated by us or by the executive, we will pay him or her any accrued
and unpaid base salary and reimburse him or her for expenses incurred through the date of termination of employment. We refer
to the foregoing as the “accrued obligations.” In addition to the accrued obligations, if the executive’s employment
with us is terminated by us without cause or by the executive for good reason, subject to the executive delivering to us a general
release of claims in our favor, we will pay Mr. Wolff as severance an amount equal to one month of his base salary for every full
year of full-time employment, subject to a minimum of six months and a maximum of nine months, payable in substantially equal
installments on a bi-weekly basis over the applicable severance period. Mr. Wolff has been employed with us for over five years.
Similarly, the amount of severance to which Ms. Gurrola will be entitled if we terminate her employment without cause or if she
resigns for good reason will be equal to nine months of her base salary, payable in one lump sum. She has been employed with us
for over 10 years. Provided that each executive timely elects continued insurance coverage pursuant to COBRA, we will reimburse
him or her for a period of months equal to the number of months paid in severance.
In
the event of a change in control and if the executive is employed by us through the effective date of the change in control, then
100% of the then unvested portion of the stock units and stock options we granted to each of Mr. Wolff and Ms. Gurrola then outstanding
will vest and, as applicable, become exercisable as of immediately before such effective date.
Other
than as described above and the agreements that govern their equity awards, we do not have any contract, agreement, plan or arrangement,
whether written or unwritten, that provides for payment to a named executive officer at, following, or in connection with the
resignation, retirement or other termination of a named executive officer, or a change in control or a change in the named executive
officer’s responsibilities following a change in control.
Outstanding
Equity Awards at Fiscal Year-End
The
following table sets forth information concerning equity awards held by the named executive officers that were outstanding as
of December 31, 2019:
2019
Outstanding Equity Awards at Fiscal Year-End
|
|
|
|
|
|
Option
Awards
|
|
|
|
|
|
Stock
Awards
|
|
Name
|
|
Date
of Grant
|
|
|
Number
of Securities Underlying Unexercised Options Exercisable (#)
|
|
|
Number
of Securities Underlying Unexercised Options Unexercisable (#)
|
|
|
Option
Exercise Price ($)
|
|
|
Option
Expiration Date
|
|
|
Number
of Shares or Units of Stock that have not Vested (#)
|
|
|
Market
Value of Shares or Units of Stock that have not Vested ($)
|
|
Allen Wolff
|
|
|
03/19/19
|
(1)
|
|
|
–
|
|
|
|
–
|
|
|
$
|
–
|
|
|
|
–
|
|
|
|
7,500
|
|
|
$
|
16,500
|
|
|
|
|
03/19/18
|
(1)
|
|
|
–
|
|
|
$
|
–
|
|
|
|
|
|
|
|
6,250
|
|
|
|
|
|
|
$
|
13,750
|
|
|
|
|
03/23/15
|
(2)
|
|
|
10,000
|
|
|
|
–
|
|
|
$
|
27.50
|
|
|
|
03/22/25
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
12/29/14
|
(2)
|
|
|
5,000
|
|
|
|
–
|
|
|
$
|
22.50
|
|
|
|
12/28/24
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sandra Gurrola
|
|
|
03/19/19
|
(1)
|
|
|
–
|
|
|
|
–
|
|
|
$
|
–
|
|
|
|
–
|
|
|
|
5,250
|
|
|
$
|
11,550
|
|
|
|
|
03/19/18
|
(1)
|
|
|
–
|
|
|
|
–
|
|
|
$
|
–
|
|
|
|
–
|
|
|
|
1,250
|
|
|
$
|
2,750
|
|
|
|
|
05/25/16
|
(2)
|
|
|
445
|
|
|
|
55
|
|
|
$
|
8.50
|
|
|
|
05/24/26
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
03/23/15
|
(2)
|
|
|
4,000
|
|
|
|
–
|
|
|
$
|
27.50
|
|
|
|
03/22/25
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
09/08/14
|
(2)
|
|
|
1,000
|
|
|
|
–
|
|
|
$
|
22.50
|
|
|
|
09/07/24
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
04/08/13
|
(2)
|
|
|
200
|
|
|
|
–
|
|
|
$
|
12.00
|
|
|
|
04/07/23
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ram Krishnan (4)
|
|
|
09/25/19
|
(1)
|
|
|
–
|
|
|
|
–
|
|
|
$
|
–
|
|
|
|
–
|
|
|
|
30,000
|
|
|
$
|
66,000
|
|
|
|
|
01/20/16
|
(2)
|
|
|
13,748
|
|
|
|
–
|
|
|
$
|
6.50
|
|
|
|
01/15/20
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
04/15/15
|
(3)
|
|
|
15,000
|
|
|
|
–
|
|
|
$
|
20.50
|
|
|
|
01/15/20
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
09/15/14
|
(2)
|
|
|
70,000
|
|
|
|
–
|
|
|
$
|
20.00
|
|
|
|
01/15/20
|
|
|
|
–
|
|
|
|
–
|
|
|
(1)
|
The
restricted stock units vest at a rate of 16.67% of the shares subject to the award on the six-month anniversary of the grant
date and the remaining units vest in 30 substantially equal monthly installments thereafter.
|
|
|
|
|
(2)
|
The
option vests and becomes exercisable at the rate of 25% of the shares underlying the option on the first anniversary of the
option grant date, and the remaining shares underlying the option vest in 36 substantially equal monthly installments thereafter.
|
|
|
|
|
(3)
|
The
option vested as to 25% of the total number of shares subject to the option on January 1, 2016 and the remaining 75% vests
in 36 substantially equal monthly installments thereafter.
|
|
|
|
|
(4)
|
All
of Mr. Krishnan’s equity awards that were outstanding as of December 31, 2019 subsequently expired unexercised and unvested.
|
We
account for stock-based payments including equity awards under our equity incentive plans in accordance with the requirements
of FASB ASC No. 718, Compensation – Stock Compensation. For a discussion regarding the effect of a change in control
on certain equity awards held by Messrs. Krishnan and Wolff and Ms. Gurrola, see “Termination of Employment and Change-in-Control
Arrangements,” above.
Director
Compensation
We
compensate our non-employee directors for their service in such capacity with annual retainers and equity compensation as described
below. Directors who are also our employees do not receive any additional compensation for their services as directors. We do
not pay fees to any of our directors for meeting attendance. The N&CG/C Committee reviews our non-employee director compensation
practices and policies at least annually and makes a recommendation to our board of directors as to the amount, form and terms
of non-employee director compensation. Our board of directors, taking the N&CG/C Committee’s recommendation into consideration,
sets the amount, form and terms of non-employee director compensation.
Annual
Retainers
We
pay our non-employee directors a $25,000 annual retainer for their services as directors. We pay the chairman of our board of
directors, assuming she or he is a non-employee director, an additional $20,000 annual retainer for services in such capacity.
We pay our non-employee directors an additional annual retainer for their service on board committees as set forth in the table
below.
|
|
Chairperson
|
|
|
Member
|
|
Audit Committee
|
|
$
|
10,000
|
|
|
$
|
5,000
|
|
N&CG/C Committee
|
|
$
|
10,000
|
|
|
$
|
5,000
|
|
The
annual retainers are paid quarterly in arrears and are paid no later than 30 days following the end of the applicable quarter.
Each non-employee director may elect that the retainer payment he or she is eligible to receive, or a portion of such retainer,
be paid in the form of a restricted stock award under our equity incentive plan rather than cash. Such an election must be made
during an open trading window under our insider trading policy and no later than the 15th day of the last month of
the quarter for which the retainer is to be paid. An election applies only to the quarter for which it is made. Once an election
is made with respect to a quarter, it may not be withdrawn or substituted unless our board of directors determines, in its sole
discretion, that the withdrawal or substitution is occasioned by an extraordinary or unanticipated event. Restricted stock awards
will be made on the same date as a cash retainer payment would otherwise be paid, will vest in full on the date of grant, and
the amount of shares subject to such award will equal the amount of the applicable cash retainer payment divided by the closing
price of our common stock on the last day of the applicable quarter.
Equity
Compensation
We
grant stock options to our non-employee directors upon the commencement of their service as a director and upon their re-election
to our board of directors. The stock options are granted under our stockholder-approved equity incentive plan.
In
connection with the commencement of a new non-employee director’s term of service, we grant to such new director a stock
option to purchase 600 shares of our common stock. These stock options have an exercise price equal to the closing price of our
common stock on the date of grant, and are fully vested and exercisable on the date of grant as to 50% of the shares and the remaining
50% of the shares vest and become exercisable, subject to the director’s continued service on our board of directors, in
12 equal monthly installments beginning in the month immediately following the date of grant.
Each
non-employee director who is re-elected for an additional term of service on our board of directors is automatically granted a
stock option to purchase 400 shares of our common stock on the date of our annual stockholder meeting. These stock options have
an exercise price equal to the closing price of our common stock on the date of grant and vest and become exercisable, subject
to the director’s continued service on our board of directors, in 12 equal monthly installments thereafter.
The
stock options described above expire on the earlier of 10 years from the date of grant or 90 days from the date the director ceases
to serve on our board of directors. In the event of a change in control, as defined in the Amended 2010 Performance Incentive
Plan, the N&CG/C Committee may in its discretion determine that these stock options vest and become fully exercisable as of
immediately before such change in control.
2019
Director Compensation
The
following table sets forth the compensation of each director, who is not a named executive officer, for service during 2019. This
table excludes Mr. Wolff, who is a named executive officer and does not receive any compensation from us for his service as a
director. See the section below entitled “Executive Officer Compensation” for information about Mr. Wolff’s
compensation.
2019
Director Compensation
|
Name
|
|
Fees
Earned
or
Paid
in
Cash (1)
|
|
|
Option
Awards (3)
|
|
|
All
Other Compensation
|
|
|
Total
|
|
Gregory Thomas
|
|
$
|
43,468
|
|
|
$
|
1,200
|
|
|
$
|
–
|
|
|
$
|
44,668
|
|
Richard Simtob
|
|
$
|
30,972
|
|
|
$
|
1,200
|
|
|
$
|
–
|
|
|
$
|
32,172
|
|
Susan Miller
|
|
$
|
10,647
|
|
|
$
|
1,094
|
|
|
$
|
–
|
|
|
$
|
11,741
|
|
Michael Gottlieb
|
|
$
|
2,431
|
|
|
$
|
1,075
|
|
|
$
|
–
|
|
|
$
|
3,506
|
|
Jeff Berg (2)
|
|
$
|
41,949
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
41,949
|
|
Steve Mitgang (2)
|
|
$
|
31,597
|
|
|
$
|
1,200
|
|
|
$
|
–
|
|
|
$
|
32,797
|
|
Paul Yanover (2)
|
|
$
|
19,839
|
|
|
$
|
1,200
|
|
|
$
|
–
|
|
|
$
|
21,039
|
|
|
(1)
|
Other
than for Mr. Simtob, the amounts reported in this column represent the sum of the cash retainer payment. For Mr. Simtob, the
amount reported in this column represent the sum of the cash retainer payment and the value of restricted stock awards issued
in lieu of a portion of the cash retainer payment, as set forth in the table below.
|
Name
|
|
Cash
Payment
|
|
|
Value
of
Restricted
Stock
Awards
|
|
|
Number
of Shares Subject to Restricted
Stock
Awards
|
|
Richard Simtob
|
|
$
|
22,500
|
|
|
$
|
8,472
|
|
|
|
3,851
|
|
|
(2)
|
Mr.
Berg and Mr. Mitgang each resigned from our board of directors in November 2019, and Mr. Yanover resigned in August 2019.
|
|
|
|
|
(3)
|
The
amounts reported in this column represent the aggregate grant date fair value of stock options granted during 2019. These
amounts were calculated in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, except that any estimate
of forfeitures was disregarded. For a description of the assumptions used in computing the dollar amount recognized for financial
statement reporting purposes, see Note 11, Shareholders’ Equity, in the Notes to the Consolidated Financial Statements
contained in our Annual Report on Form 10-K filed with the SEC on March 19, 2020. As of December 31, 2019, our non-employee
directors had options outstanding to purchase the following number of shares of our common stock:
|
Name
|
|
#
of Shares Subject to Outstanding Options
|
|
Gregory Thomas
|
|
|
1,400
|
|
Richard Simtob
|
|
|
1,400
|
|
Susan Miller
|
|
|
600
|
|
Michael Gottlieb
|
|
|
600
|
|
Steve Mitgang
|
|
|
3,967
|
|